Warm weather and loosened restrictions renew confidence and demand for NYC retail
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MARKETVIEW
Manhattan Retail, Q2 2021
Warm weather and loosened
restrictions renew confidence
and demand for NYC retail
Consumer Confidence NYC Unemployment NYC Quarterly Retail Sales NYC Retail Job Count
127.3 10.9% $36.9B 288.6K
*Arrows indicate change from previous quarter. Sources: The Conference Board, June 2021;
NYS Department of Labor, May 2021;
U.S. Census Bureau, Oxford Economics, June 2021;
NYS Department of Labor, May 2021.
MARKET OVERVIEW
• In June, New York Governor Cuomo
lifted the state’s COVID-19 restrictions. The Manhattan retail market began its road to
The State's health guidance and recovery from the impact of COVID-19 in the
industry specific guidelines—including second quarter of 2021, with many market metrics
curfews, capacity restrictions, social starting to show positive trends. While some
distancing, cleaning and disinfection, fundamentals are improving as the city reopens,
health screening and contact leasing, asking rents and available space are still
information for tracing—are now off from pre-pandemic levels. Leasing velocity in
optional for retail, entertainment, and Manhattan decelerated in the second quarter of
other commercial settings.1 2021, marking eight consecutive quarters of
decline. Additionally, the number of direct,
• New York City Mayor Bill de Blasio
ground-floor availabilities in Q2 2021 increased
announced that the city’s office, retail,
to 290 spaces from 275 in Q1 in the 16 prime retail
and entertainment sectors can reopen
corridors tracked by CBRE. The average retail
at 100% as of July 1st. Restaurants,
asking rent in Manhattan’s prime 16 retail
gyms, shops, hair salons and arenas are
corridors dropped 10.7% year-over-year and 0.6%
now reopened at full capacity.2
quarter-over-quarter to $615 per sq. ft. in Q2 2021,
• Harry Potter New York, a store based on marking the 15th consecutive quarterly decrease.
author J.K. Rowling’s fantasy novels,
opened its first 20,000-sq.-ft. brick and The market saw a few bright spots, as Vashi, AMI
mortar flagship at 935 Broadway in Paris, Kanuk and Mezeh Mediterranean Grill
NYC’s Flatiron/Union Square signed new leases for their first ever New York City
neighborhood. The shop includes 15 locations – a vote of confidence in the city and its
distinct areas as well as various recovery. Opportunistic retailers are taking
handcrafted exhibits and unique advantage of the tenant-favorable market
experiences exclusive to NYC.3 conditions, successfully negotiating enhanced
tenant improvement allowance, free rent,
Q2 2021 CBRE Research © 2021 CBRE, Inc. 1MARKETVIEW MANHATTAN RETAIL
flexibility on term length and percentage-rent Figure 1: Seasonally Adjusted Total Employment
deal structures.
5,000
4,800 4,685
ECONOMIC OVERVIEW
All employees (thousands)
4,600
4,400 4,150
2021 will exhibit the highest U.S. economic growth 4,200
4,000 3,712
since the early 1980s, with GDP growth hitting 7%
3,800 3,555
as the pandemic fades and society and commerce
3,600
normalize. U.S. consumer spending has been
3,400
strong throughout, and particularly those who 3,200
increased their savings amid the pandemic are 3,000
increasing their spending as more of the economy
reopens and widespread vaccinations allow for
resumption of more “normal” activity. Today, Source: NYC Department of Labor, May 2021
demand for restaurants and travel-related leisure is
surging faster than establishments can match with
Figure 2: NYC Total Retail Sales | Annual
workers, bringing relief to a hard-hit corner of the
labor market. Average hourly earnings for leisure
$160
and hospitality workers surged 8% from late 2020, $137
$140
compared to about 2% for the broader workforce.
Billions of $USD $120
Wage and price escalations have driven $100 $83
inflationary fears. In May, core CPI grew at its $80
fastest annual pace since the early 1990s at 5%. $60
Inflation will fall from current levels but remain $40
above the Fed’s traditional 2% target through $20
2022. The Fed is likely to retain its ‘dovish’ stance $0
but could begin to curtail its asset purchase
program earlier than expected.
Source: US Census Bureau, Oxford Economics, June 2021.
Locally, quarterly retail sales in NYC continue to
improve, rising roughly 1.4% to $36.9 billion in
the second quarter while the city’s overall
unemployment rate continues to improve but
remains elevated. At 10.9% as of May 2021, it is
down considerably from its 20.0% pandemic peak,
but higher than the 3% range just prior to the
pandemic.
Q2 2021 CBRE Research © 2021 CBRE, Inc. 2MARKETVIEW MANHATTAN RETAIL
LEASING
Retail leasing velocity in Q2 2021 decreased for Flatiron/Union Square saw activity in Q2 2021
the eighth consecutive quarter. The Q2 2021 with five transactions for over 25,000 combined sq.
rolling four-quarter aggregate leasing velocity, ft., many of which are on Broadway. The largest
which measures total leasing (renewals and new deal was signed by Mezeh Mediterranean Grill,
leases) for the four prior quarters, was a Mediterranean restaurant chain based out of
approximately 1.3 million sq. ft., falling roughly Virginia, leasing over 7,800 sq. ft. for its first New
15% from the prior quarter and 60% year-over- York outpost at 900 Broadway. Timothy Oulton, an
year.4 English furniture brand, also committed to more
than 7,100 sq. ft. for its first NYC ground floor
SoHo recorded the highest leasing velocity brick and mortar store at 901 Broadway.
in Q2 2021 with over 47,000 sq. ft. transacted
across 13 deals. Greene Street was the most active Figure 3: Four Quarter Aggregate Leasing Velocity
street in this popular retail neighborhood as four 4.5
4.0
tenants completed over 21,000 sq. ft. of leases in
Millions of Square Feet
3.5
the second quarter. The largest transaction was 3.0
by Vashi, a luxury jewelry brand based in the UK, 2.5
which secured more than 11,000 sq. ft. for their 2.0
1.5
first U.S. outpost at SL Green’s 110 Greene
1.0
Street. AMI Paris, a French apparel brand by 0.5
Alexandre Mattiussi, signed a new lease for 0.0
Q2 2018
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Q1 2021
Q2 2021
2,500 sq. ft. at 77 Greene Street, and Canadian
winter coat and accessories brand Kanuk took
4,000 sq. ft. at 75 Greene Street – each marketing
their first brick and mortar outpost in Manhattan. Source: CBRE Research, Q2 2021
Broadway was also an active street in Q2, as Vaber
Figure 4: Rolling Four-Quarter Aggregate Total Leasing Velocity
Medical Testing, a COVID testing medical lab,
signed for nearly 5,000 sq. ft. at 597 Broadway, Period 12 Month Aggregate (Sq. Ft.)
while Harley-Davidson, the American motorcycle
Q2 2018 3,365,275
manufacturer, is relocating from 376 Broadway
Q3 2018 3,547,517
into nearly 4,300 sq. ft. at 595 Broadway.
Q4 2018 3,848,553
Q1 2019 3,886,288
The Plaza District also recorded a high level of
Q2 2019 4,106,544
leasing activity in the second quarter with Q3 2019 3,941,360
approximately 32,000 sq. ft. in two transactions. Q4 2019 3,886,813
The larger and more significant transaction was Q1 2020 3,788,559
Mango, the Spanish apparel and accessories Q2 2020 3,295,656
brand, planning to take over Ralph Lauren’s Q3 2020 2,854,961
former 28,000-sq.-ft. flagship store at 711 Fifth Q4 2020 2,114,662
Avenue, while Shake Shack announced plans for a Q1 2021 1,561,796
new 3,200-sq.-ft. restaurant at 399 Park Avenue. Q2 2021 1,328,004
Source: CBRE Research, Q2 2021
Q2 2021 CBRE Research © 2021 CBRE, Inc. 3MARKETVIEW MANHATTAN RETAIL
With 23 closed deals, food and beverage (F&B) was Mofongo, a Latin restaurant and nightclub owned
the most active category in terms of number of by Felix Cabrera at 29 West 36th Street. The
transactions and square footage leased, with more aforementioned 7,800 sq. ft. lease signed by
than 83,000 sq. ft. or roughly 34% of the total retail Mezeh Mediterranean Grill, as well as a new 7,600
square footage leased in Manhattan in Q2 sq. ft. outpost by Sweetgreen at 315 Hudson Street
2021. The most notable F&B transaction was also contributed to the flurry of activity in this
the 15,000-sq.-ft., 10-year lease by La Casa Del sector.
Figure 5: Most Active Neighborhoods by Sq. Ft. Leased | Q2 2021 Figure 6: Most Active Tenant Type by Sq. Ft. Leased | Q2 2021
Leased Leased
Neighborhood Number of deals Tenant Type Number of deals
(Sq. Ft.) (Sq. Ft.)
SoHo 13 47,332 Food & Beverage 23 83,333
Plaza District 2 31,622 Apparel 10 49,236
Flatiron/Union Square 5 25,300 Health Care 2 17,429
Upper West Side 7 24,114 Jewelry 2 14,374
Upper East Side 5 15,213 Home Furnishing 1 7,170
Penn Plaza/Herald Square 1 15,000 Footwear 2 6,822
NoLIta 4 11,752 Bed & Bath 2 4,800
Greenwich Village 8 11,685 Consumables 1 4,500
Midtown West 2 11,461 Telecommunications 1 4,300
Grand Central 3 9,715 Automotive 1 4,300
Source: CBRE Research, Q2 2021 Source: CBRE Research, Q2 2021
Figure 7: Top Lease Transactions | Q2 2021
Tenant Size (Sq. Ft.) Address Neighborhood Tenant Type
Mango 28,335 711 Fifth Avenue Plaza District Apparel
La Casa Del Mofongo 15,000 29 West 36th Street Penn Plaza/Herald Square Food & Beverage
CityMD 12,429 1865 Broadway Upper West Side Health Care
Vashi 11,777 110 Greene Street SoHo Jewelry
Mezeh Mediterranean Grill 7,800 900 Broadway Flatiron/Union Square Food & Beverage
Sweetgreen 7,665 315 Hudson Street Hudson Square Food & Beverage
Timothy Oulton Retail USA 7,170 901 Broadway Flatiron/Union Square Home Furnishing
Wolkonsky Bakery & Cafe 6,414 8 West 40th Street Grand Central Food & Beverage
Vaber Medical Testing LLC 5,000 597 Broadway SoHo Health Care
Flex Mussels 4,560 1431 Third Avenue Upper East Side Food & Beverage
Source: CBRE Research, Q2 2021
Q2 2021 CBRE Research © 2021 CBRE, Inc. 4MARKETVIEW MANHATTAN RETAIL
AVAILABILITY peak of the market chose not to renew. Examples
of this were the 8,000 sq. ft. space formerly
In Q2 2021, the number of direct ground floor occupied by The White Company at 155 Fifth
availabilities tracked across Manhattan’s 16 Avenue and the 9,000 sq. ft. former LOFT space at
premier shopping corridors increased from 275 to 156 Fifth Avenue. This corridor and submarket
290 quarter-over-quarter, a 5.5% hike and have seen moderate leasing activity over the past
replacing last quarter’s total as the new high several months, fresh opportunities now available
watermark for availability. on the avenue could attract additional demand as
tenants look to capitalize on the favorable market
Upper Madison Avenue added 11 new listings over conditions.
the past 12 months – increasing the number of
ground floor spaces by 25.0% from 44 to 55. In Q2 AVERAGE ASKING RENTS
2021, the former Sergio Rossi space as 680
Madison Avenue and the former Givenchy space at Average asking rent in Manhattan’s retail corridors
745 Madison Avenue were brought to market as declined for the 15th consecutive quarter, falling to
demand from luxury retailers continues to be $615 per sq. ft. in Q2—a 0.6% decline from Q1
strained by the impact of the COVID-19 pandemic. 2021 and 10.7% drop from the prior year. The
Both retailers and consumers have increased focus current rent marks the lowest level for nearly a
on the more affordable and active markets in decade. The aggregate average asking rent among
Midtown South and Downtown. Stagnant all available spaces in the 16 corridors increased
Inventory and a lack of new demand continue to 1.9% quarter-over-quarter but declined 14.2%
make the Upper Madison corridor a challenging year-over-year to $543 per sq. ft. While there was
draw for new retailers. a slight slowdown in the quarterly decline in Q2,
pricing remains mostly negotiable beyond face
Fifth Avenue in Flatiron also saw availabilities asking rents as leasing agencies remain reluctant
double over the past 12 months, from 11 to 22 to quote numbers due to the fear of scaring
ground floor spaces. In Q2 2021, three new potential tenants away. Concessions such as
availabilities whose tenants signed during the generous tenant improvement allowances, free
rent periods, lease flexibility through termination
Figure 8: Count of Direct Ground-Floor Availabilities clauses and renewal options, and percentage-rent
350
deals remain the major talking points of the
Manhattan retail market.
300
# of Direct Ground Floor
250
Among the corridors, Spring Street in SoHo’s
Availabilities
200 22.9% annual decline was the largest percentage
150 decrease of Q2 2021. Asking rents fell from $631
100 per sq. ft. to $487 per sq. ft. year-over-year. In the
50
prior quarter, pricing in the corridor dropped
below $500 per sq. ft. to levels not seen since
0
tracking began in 2015. Ongoing downward
2020 Q2
2020 Q3
2020 Q4
2021 Q1
2021 Q2
repricing of the stagnant inventory continued
to push rents to historic low levels.
Source: CBRE Research, Q2 2021
Q2 2021 CBRE Research © 2021 CBRE, Inc. 5MARKETVIEW MANHATTAN RETAIL
The Times Square corridor, which has been deeply Figure 9: Year-over-Year Asking Rent Change
impacted by the disruption to tourism, recorded
30.0%
the second largest annual decrease in Q2 2021 25.0%
20.0%
with a 22.5% year-over-year decline in average
15.0%
rents, from $1,647 per sq. ft. to $1,277 per sq. ft., 10.0%
the lowest level since 2011. Despite some recent 5.0%
0.0%
long-term commitments to the area by credit -5.0%
F&B tenants and optimism about improving foot -10.0%
-15.0%
traffic on the horizon, downward pressure -20.0%
2013 Q2
2014 Q2
2015 Q2
2016 Q2
2017 Q2
2018 Q2
2019 Q2
2020 Q2
2021 Q2
persists from stagnant inventory in the corridor
and retailers looking to sublet existing locations.
Prince Street in SoHo was one of the only corridors Source: CBRE Research. Q2 2021
to record an increase in average asking rent, Figure 10: Average of Corridors
rising 13.3% quarter-over-quarter and 7.4% year-
over-year to $469 per sq. ft. The uptick was mainly $1,200
Avg. Asking Rent $ per Sq. Ft.
caused by the addition of above-average priced $1,000
space formerly occupied by UNO de 50 at 123
$800
Prince Street, while the inventory remained mostly
$600
unchanged.
$400
Meatpacking District’s Washington Street corridor $200
also saw a sizable increase in pricing in the second $0
2013 Q2
2014 Q2
2015 Q2
2016 Q2
2017 Q2
2018 Q2
2019 Q2
2020 Q2
2021 Q2
quarter. The average asking rent increased 21.2%
quarter-over-quarter to $501 per sq. ft. While
one of the lowest-priced spaces on the corridor at
817 Washington Street was leased and removed Source: CBRE Research, Q2 2021
by Le Pecora Bianca in Q2 2021, the addition of the
above-average-priced former Sugar Factory space
at 835 Washington Street resulted in a significant
jump in asking rents on the corridor.
Q2 2021 CBRE Research © 2021 CBRE, Inc. 6MARKETVIEW MANHATTAN RETAIL
Figure 11: Average Asking Rents* | Q2 2021
Total direct
ground floor Quarter-over- Year-over-year
Neighborhood Corridor Parameters Q2 2021 Q1 2021 Q2 2020
availabilities quarter change change
Q2 2021
Upper West Side Broadway | 72nd to 86th Streets 25 $229 $226 1.2% $243 (5.8%)
Upper East Side Third Avenue | 60th to 72nd Streets 16 $185 $197 (5.9%) $206 (10.2%)
Madison Avenue | 57th to 72nd
Upper Madison Ave 55 $773 $731 5.8% $882 (12.3%)
Streets
Plaza District Fifth Avenue | 49th to 59th Streets** 10 $2,750 $3,000 (8.3%) $3,000 (8.3%)
Grand Central Fifth Avenue | 42nd to 49th Streets** 15 $675 $686 (1.6%) $753 (10.4%)
Broadway & Seventh Avenue | 42nd to
Times Square 12 $1,277 $1,293 (1.2%) $1,647 (22.5%)
47th Streets
34th Street | Fifth to Seventh
Herald Square 11 $500 $503 (0.4%) $486 3.0%
Avenues**
Flatiron/Union Square Broadway | 14th to 23rd Streets 16 $318 $309 2.9% $357 (10.8%)
Flatiron/Union Square Fifth Avenue | 14th to 23rd Streets 22 $310 $298 4.2% $334 (7.2%)
SoHo Broadway | Houston to Broome Streets 24 $340 $310 9.9% $399 (14.7%)
Prince Street | Broadway to West
SoHo 9 $469 $414 13.3% $437 7.4%
Broadway
Spring Street | Broadway to West
SoHo 9 $487 $479 1.7% $631 (22.9%)
Broadway
Meatpacking 14th Street | Eighth to Tenth Avenues 17 $278 $293 (5.2%) $345 (19.4%)
Gansevoort | Little West 12th Street |
Meatpacking 16 $337 $340 (0.9%) $378 (10.9%)
13th Street | Ninth to Tenth Avenues
Washington Street | 14th to
Meatpacking 6 $501 $413 21.2% $503 (0.6%)
Gansevoort Streets
Broadway | Battery Park to Chambers
Downtown 27 $407 $406 0.2% $410 (0.8%)
Street
All Average of corridors - $615 $618 (0.6%) $688 (10.7%)
Quarter-over- Year-over-year
Total direct ground floor availabilities Q2 2021 Q2 2021 Q1 2021 Q2 2020
quarter change change
Aggregate Average Asking Rent** 290 $543 $533 1.9% $633 (14.2%)
*Based on ground floor only, not inclusive of subleases.
**Historic Average Asking Rent data has been revised since original publication due to updated information. Source: CBRE Research, Q2 2021.
Q2 2021 CBRE Research © 2021 CBRE, Inc. 7MARKETVIEW MANHATTAN RETAIL
RETAIL CORRIDORS
O V E R A L L A G GR EGAT E A V E R A GE A S K I NG: $54 3 P SF | 1.9%
O V E R A L L A V E R A GE A S K I NG R E N T : $61 5 P SF | (0.6%)
W 86th St. E 86th St.
UPPER WEST SIDE UPPER MADISON
B R O A D WAY M A D ISON A V E N U E
86th Street to 72nd Street 72nd Street to 57th Street
Q2 Rent: $229 PSF Q2 Rent: $773 PSF
Q-on-Q Change: 1.2% Q-on-Q Change: 5.8%
MIDTOWN W 72nd St. E 72nd St.
FIFTH AVENUE
UPPER EAST SIDE
THIRD AVENUE
59th Street to 49th Street
72nd Street to 60th Street
Q2 Rent: $2,750 PSF
Q2 Rent: $185 PSF
Q-on-Q Change: (8.3%)
Q-on-Q Change: (5.9%)
TIMES SQUARE W 57th St. E 57th St.
MIDTOWN
Avenue of the Americas
Madison Avenue
Park Avenue
Lexington Avenue
Third Avenue
B R O A D WAY &
SEVENTH AVENUE FIFTH AVENUE
47th Street to 42nd Street 49th Street to 42nd Street
Q2 Rent: $1,277 PSF Q2 Rent: $675 PSF
Q-on-Q Change: (1.2%) Q-on-Q Change: (1.6%)
W 42nd St. E 42nd St.
HERALD SQUARE
34TH STREET FLATIRON
Fifth Avenue to FIFTH AVENUE
Seventh Avenue W 34th St. E 34th St. 23rd Street to 14th Street
Q2 Rent: $500 PSF Q2 Rent: $310 PSF
Avenue of the Americas
Fifth Avenue
Madison Avenue
Park Avenue
Lexington Avenue
Third Avenue Q-on-Q Change: 4.2%
Q-on-Q Change: (0.4%)
MEATPACKING W 23rd St. E 23rd St.
FLATIRON
14TH STREET B R O A D WAY
Eighth Avenue to 23rd Street to 14th Street
Tenth Avenue Q2 Rent: $318 PSF
Q2 Rent: $278 PSF W 14th St. E 14th St. Q-on-Q Change: 2.9%
Q-on-Q Change: (5.2%)
MEATPACKING SOHO
W A S H INGT ON S T R E E T PRINCE STREET
14th Street to Broadway to W. Broadway
Gansevoort Street Q2 Rent: $469 PSF
Q2 Rent: $501 PSF Q-on-Q Change: 13.3%
Q-on-Q Change: 21.2%
SOHO
MEATPACKING B R O A D WAY
LITTLE W.12TH, 13TH &
Houston Street to
GANSEVOORT STREETS
Broome Street
Ninth Avenue
Q2 Rent: $340 PSF
to Tenth Avenue Chambers St.
Q-on-Q Change: 9.9%
Q2 Rent: $337 PSF
Q-on-Q Change: (0.9%)
DOWNTOWN
SOHO B R O A D WAY
S P R I NG S T R E E T Chambers Street to
Broadway to W. Broadway Battery Park
Q2 Rent: $487 PSF Q2 Rent: $407 PSF
Q-on-Q Change: 1.7% Q-on-Q Change: 0.2%
Q2 2021 CBRE Research © 2021 CBRE, Inc. 8MARKETVIEW MANHATTAN RETAIL
DEFINITIONS
RENT CHANGES
AVAILABILITY Percentage changes to asking rents that are less
Direct space that is actively marketed; includes than 1% are reported as flat or virtually
spaces for immediate and future occupancy. unchanged. Rent changes greater than 1% are
reported as either increases or decreases.
ASKING RENT
Average asking rent calculated using the straight- ROLLING FOUR-QUARTER AGGREGATE
line average for direct ground-floor spaces that TOTAL LEASING VELOCITY
have street frontage along one of the 16 corridors This metric is calculated as the sum of total
tracked by CBRE. Does not include sublease space. leasing velocity for the previous four quarters. For
example, the rolling aggregate for Q2 2021
AGGREGATE AVERAGE ASKING RENT includes total leasing velocity over Q1 2021, Q4
The straight-line average of all direct, ground-floor 2020, Q3 2020 and Q2 2020. The rolling four-
availabilities with corridor frontage. quarter aggregate figure helps track momentum in
leasing velocity while controlling for the normal
AVERAGE OF CORRIDORS up and down variations seen between quarterly
The average rent for the 16 main retail corridors leasing totals. The aggregate data lags by one
tracked by CBRE. This is calculated by taking the quarter, to allow time for complete data collection
average of the 16 corridor averages for the quarter. of closed deals.
LEASING VELOCITY TOTAL AVAILABLE SPACES
Total amount of square feet leased within a Based on available ground-floor space with street
specified period of time, including pre-leasing and frontage that faces one of the 16 corridors tracked
renewals. by CBRE.
SOURCES
1. https://www.governor.ny.gov/news/governor-cuomo-announces-covid-19-restrictions-lifted-70-adult-new-yorkers-have-received-first
2. https://www.cnbc.com/2021/04/29/new-york-city-mayor-bill-de-blasio-says-the-city-will-re-open-100percent-on-july-1.html
3. https://nypost.com/2021/06/03/harry-potter-fans-wait-hours-in-the-rain-for-nyc-store-opening/
4. The Q1 2021 rolling four-quarter aggregate total leasing velocity was revised since original publication, based on the availability of additional leasing data.
CONTACTS
NICOLE LARUSSO HIRONORI IMAIZUMI
Senior Director, Research & Analysis Senior Field Research Analyst
+1 212 984 7188 +1 212 656 0538
Nicole.LaRusso@cbre.com Hiro.Imaizumi@cbre.com
MICHAEL SLATTERY CBRE OFFICE
Associate Field Research Director
+1 212 656 0583 200 Park Avenue
Michael.Slattery@cbre.com New York, NY 10166
Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy,
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